During an exclusive interview with staffingamericalatina, CIETT’s President provided important concepts and courses of action to develop better labour markets in the region.

What is your view on Latin American Labour Markets?

My view on the Latin American market is that I feel that agency work or staffing has now been around for approximately forty years, right? Forty years I would say. And we actually in the lost when things haven’t see a lot of details. If we look at regulation, most of the regulations dates from the 1970’s; if we look at markets penetration rates, they are of 0.4, 0.5, 0.6; if I look at Argentina as one the major markets, it is stuck, not much happens.

A notable exception is Colombia of course. In Colombia there is a big staffing market and there certainly has been some recent growth. So if I look, and cover the three countries I feel are the most important ones, Colombia, Brazil, and Argentina -there are others: Peru, Uruguay, Chile but they are smaller markets-.

So, if I look at the three major markets, the big question, especially for Brazil and Argentina, is how to drive growth, how to enhance growth. And for that reason in Brazil, CIETT installed a task force that has tasks for multinational companies and is dealing on what is needed to drive growth. That, to me is the one issue that applies to the whole Latin America, how to drive growth.

In our countries, as in many other countries in the world, the youth unemployment rate duplicates the general unemployment rate. In addition, young people are the ones who suffer informality the most. What is CIETT experience on this issue?

Let’s go first to youth unemployment. Youth unemployment is a big issue today, it is really a big issue. The higher unemployment, the higher youth unemployment, and actually, as long as is two times as high, you don’t have to worried, that’s quite normal. If it is higher than two times as high as normal unemployment, you can really start to get worried.   That doesn’t mean you have to do anything. You have to keep young people connected to the labour market, you have to give them training, you have to give them extra education, keep them connected to the labour market so that they don’t become what I heard is called in Brazil a generation of “ne-ne” -not in employment, not in education-, or what we call in Europe, NEETs. If that happens, we really have to grab them, connect them to the labour market, apprenticeships, training. There are a lot of good practices in which we, as a sector, are involved, having projects with young people, connecting them to the labour market and bringing them to the labour market. So, we can help by being the bridge for these people to the labour market, giving them work experience and making sure that they keep the connection. That’s about youth unemployment.

Informality, for me, is something different, because informality is not only about young people, it’s also about all people, and it’s a labour market issue. I think I read somewhere that Argentina has an informality rate of 33%, which is enormous. If you look at Europe, Italy has about 21%, the UK has about 10%, Germany 13%, of GDP -is not only of working population, is a percentage of GDP-, its a major problem, not only here, its a major problem everywhere. It means a lost of income, a lost of talent, a lost of taxes, a lost of security… and it is something that we really, as a society, have to think about how to deal with. The good news is society is thinking about it. In ILO there has been a discussion, during last year’s conference, on informality and how to solve it, which will be picked up in this year’s conference, hoping to lead to some recommendations. Also, in the European Union, there will be a policy. A platform was created against undeclared work.

We, as a sector, are part of all these discussions. We have been very active and that is not for nothing, because, actually, at the end of the day, it is quite simple, very simple. There is a clear correlation, the higher the agency work penetration, the lower the undeclared work. So, if agency work is regulated appropriately, and is seen as a decent way of work and people use agency work, there is a guarantee that informality, undeclared work, really drops. So this is why we try to work with governments, with policy makers, showing this, and hoping that, with appropriate regulation, agency works, together with other measures, help to lower informality. It is not only about agency work, it is also about other measures, it is enforcement, it is inspection, it is maybe lower taxes. In other words, a flexible labour market is one of the essentials to drive down informality.

 CIETT plays an active role in social dialogue and has contributed to the development of the ILO’s concept of Decent Work. In what way may Latin American countries grow and develop in terms of Decent Work creation?

It is clear that staffing, agency work, contributes to the creation of decent jobs. It is clear that staffing doesn’t substitute jobs, but creates new jobs. It is clear also that we provide work for a lot of people. Every year we help 12.9 million youngsters enter the labour market and employ 36 million people all around the world. The thing is, and that is quite an important debate which is being held nowadays, is what is decent work, what is quality work, how to define it.

Trade unions will say, its fulltime, open-ended contracts, but that of course is not all. There is a lot more decent work than that. On the one hand, we should take into account that the economy, the world needs flexibility in order to be competitive. On the other hand, not every worker wants to have open ended fulltime contracts, they want to have diversity and flexibility as well. Ok, so there is a need for flexibility, there is also a need for decent work.

Back to the question, what is decent work, what is quality work, there is one very nice research by the London Metropolitan University in assignment to the European Union, where they try to figure out and define quality work. They defined nine elements of quality work and tried to rate them on a scale of one to five. And these nine elements are not only job security, which is dismissal protection, but also wages, pensions, welfare, training, transitions, nine elements in total. They rated them on a scale form one to five.

And what you see is that actually if you rate the contracts, fulltime open ended, part time open ended, fixed term and agency work, they all more or less are the same, the difference is only about 1% to 2%. The real difference is in hour contracts, is in informal work, it is in occasional work, seasonal work. Those are the jobs that are of lower quality.

So what we actually shouldn’t do is put more regulation on agency work. We should put less regulation on agency work, to a more inclusive, cohesive labour market and should try to fight the informal forms and less formal forms, like informal work, like contracts per hour. Unions think that if you abolish agency work everyone will have a fulltime open ended contract. Of course, that is absolutely not true. If you abolish agency work and fixed-term contracts, everybody will be in informal work, and that’s what we don’t want.

What role must communication, research and content diffusion play in order to achieve more formal and inclusive labour markets?

Maybe the sector in Latin America has to become more educated on how to tell stories. We have a lot of good stories to tell. We also have lots of research, we know the issues. What you actually should think is what is the issue, what is the solution and what is the proof I have. That’s the start.

I think that in Latin America we know what the issues are, we also know what the solutions are -for instance, to ratify ILO’s Convention .181-, and we also have quite some research. What we maybe should improve is how we tell the stories and be consistent in the storytelling and tell them with emotions.

I think the whole sector is trying to do that. The CIETT campaign “Way to work” is a start of that and it has brought us a lot, we have made pledges to the labour market, we have launched the campaign. I really wish Latin America will pick up on the CIETT campaign “Way to Work” and localize it. And also try to tell the story of why we are contributing to the labour market. There are so many good stories to tell.